When you buy a piece of land in Vermont — whether it’s two acres with a shed or a full farm with barns and fields — one of the first things you’ll run into is property tax. Vermont has some of the highest property tax rates in the nation, and for many families, that can feel overwhelming. But here’s the good news: Vermont also has a program designed to make those taxes fairer for everyday residents. It’s called the Homestead Declaration and Property Tax Credit, and if you own and live on your Vermont homestead, you’ll want to know how it works.
What Is the Vermont Homestead Declaration?
The Homestead Declaration is a simple but important form (HS-122) that tells the State of Vermont: “Yes, this property is my primary residence.” By filing it, you classify your property as a homestead rather than non-residential land.
Why does that matter? Because Vermont taxes homestead property differently than second homes, rentals, or commercial properties. Your homestead is taxed at the education property tax rate tied to income levels in your town, while non-residential properties are taxed at a higher, flat statewide rate.
In other words: filing the declaration makes sure you aren’t being taxed like a ski condo or a business.
What Is the Vermont Property Tax Credit?
Along with the declaration, Vermont offers a Property Tax Credit (sometimes called a Property Tax Adjustment). This is where the real savings happen for many families.
The credit is based on your household income and the amount of education tax assessed on your home. If your household income falls under certain limits, the state may reduce the education property tax portion of your bill. For some households, the savings can be thousands of dollars each year.
Who Qualifies?
To benefit, you must:
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Live in Vermont year-round. You must be domiciled in the state for the entire tax year.
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Own and occupy your home. It has to be your principal residence as of April 1.
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File the forms. You need to submit both the Homestead Declaration (HS-122) and the Household Income Schedule (HI-144) when you file your Vermont taxes.
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Meet income limits. If your household income is above the set ceiling (varies year to year), you may not qualify for the credit, though you still need to file the declaration.
One important note: if part of your property is used for business or rental purposes, you may need to report that. For example, if you run a farm stand or rent out a cabin, that portion might be taxed differently. But small-scale use (generally under 25%) often doesn’t affect your homestead status.
Deadlines and Filing
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April 15 – This is the standard deadline to file your Homestead Declaration and Property Tax Credit forms along with your income tax return.
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October 15 – Late filing deadline, though there can be penalties.
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If you miss both, you may lose the adjustment for that year — so it pays to get your paperwork in on time.
How the Credit Shows Up
The credit doesn’t come as a check in the mail. Instead, it’s applied directly to your property tax bill. Your town treasurer will list it as a reduction on the bill you get in July or August. The credit is divided evenly between installments, so you’ll see it spread out through the year.
This makes it easier to budget, because you know what you actually owe the town after the adjustment is factored in.
Why It Matters for Homesteaders
For homesteaders, every dollar matters. Between feed costs, building repairs, seeds, and heating fuel, expenses add up fast. Property taxes can be one of the biggest line items in your budget.
Declaring your homestead and filing for the credit can make the difference between scraping by and breathing a little easier. It’s not uncommon for Vermont families to save hundreds or even thousands of dollars a year through this program.
And there’s another reason it matters: fairness. The system is designed so that people who actually live and work here year-round aren’t taxed at the same rate as vacation homeowners or investment properties. Filing your declaration is how you claim your place as a resident and a steward of the land.
A Real-Life Perspective
When I moved onto my smaller homestead, I quickly realized how critical this was. On my old 37-acre farm, the property taxes were enormous — another layer of stress on top of mortgage payments and upkeep. Downsizing to 2.5 acres free and clear was the first relief, but filing my homestead declaration was the second.
The first year I qualified for the property tax credit, I remember opening my tax bill and seeing the adjustment already applied. It felt like a small victory — the state recognizing that I wasn’t running a ski rental or vacation house, I was just trying to live and work on my piece of Vermont soil.
How to File
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Gather household income info. You’ll need details for everyone in your household, not just the property owner.
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File HS-122 and HI-144. These can be filed online through the Vermont Department of Taxes or by paper when you do your state return.
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Double-check with your town. Make sure your local listers have your property classified as a homestead, especially if you just purchased it.
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Mark your calendar for April 15. Don’t miss the deadline.
If you’re unsure, most tax preparers in Vermont are very familiar with the process, and the Department of Taxes has resources online and by phone.
Closing Thoughts
Homesteading in Vermont is about more than barns and gardens. It’s also about navigating the systems that keep you on your land. The Homestead Declaration and Property Tax Credit may not sound exciting, but they are powerful tools to make rural living sustainable.
If you own your home and live on the land, this program was made for you. Filing the declaration ensures you’re taxed fairly, and the property tax credit can make your budget stretch further.
Every spring when I file mine, I think about it as another form of stewardship — not just of my rabbits, gardens, and sheds, but of the place I call home.